Big Law Firms and Banking Experts Venture into Crypto to Seize Lucrative Opportunities
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Big law firms and legal experts from major banks are making a bold move into the crypto industry, aiming to capitalize on its lucrative potential.
Lawyers, enticed by the prospects of financial rewards and the need for specialized legal counsel, are venturing into the world of cryptocurrencies, according to a recent report from Financial News.
The traditional finance sector has been embracing cryptocurrencies, with big banks establishing in-house trading desks and offering spot bitcoin ETFs.
This has given the crypto sector a newfound legitimacy, attracting lawyers who are eager to help firms navigate the increasingly complex regulatory environment.
Now is Time for Lawyers to Enter Crypto
Marcus Hughes, the global head of regulatory strategy at Kraken, made the switch to crypto in 2018 after spending almost a decade in legal roles at Morgan Stanley.
He believes that now is the opportune time for lawyers to enter a sector that was once considered the wild frontier of finance.
“Tradfi lawyers want to join crypto. I hear from them whenever I meet them,” he told Financial News.
“These lawyers are looking at the crypto space because they have the ability to expand the scope of what they do rather than just being known as cash equities person or equities derivatives person.”
Lawyers are not only interested in crypto for the chance to develop new skills but also for the potential financial rewards it offers.
For instance, Kirkland & Ellis, the world’s largest law firm by revenue, earned over $120 million for its work as lead counsel in the bankruptcy cases of crypto firms BlockFi, Celsius Network, and Voyager Digital.
The amount far exceeded the $42 million it earned as counsel in the bankruptcy cases of WeWork and Rite Aid.
Recognizing the growing demand for legal expertise in the crypto space, major law firms such as Latham & Watkins, Baker McKenzie, and Linklaters have established dedicated blockchain and crypto units.
Banking Experts Join Crypto As Well
In addition to law firms, in-house legal experts at banks, asset managers, and hedge funds are also capitalizing on the increasing popularity of digital assets.
The fast-paced nature of cryptocurrencies and the growing institutional interest have prompted lawyers with traditional finance backgrounds to transition into the crypto and digital asset space.
London-based law firms, in particular, have shifted their focus to digital assets, with crypto law poised to become a practice area similar to data protection law.
While the prospects in the crypto sector are enticing, there are inherent risks and challenges.
The volatility and controversies surrounding cryptocurrencies have led to the collapse of major players, underscoring the potential pitfalls for lawyers entering this domain.
However, global initiatives to regulate crypto have instilled confidence in legal professionals, mitigating some concerns.
Specialist crypto firms often offer higher salaries and equity growth to compensate for the additional risks involved.
Nevertheless, lawyers must adapt to the rapidly changing regulatory landscape and acquire technical knowledge of blockchain and crypto to effectively serve their clients.
Navigating the complex regulatory landscape is a significant challenge for lawyers entering the crypto field.
The borderless nature of crypto businesses and the diverse legal regimes governing digital assets across jurisdictions require lawyers to navigate intricate regulatory frameworks.
Interpreting and understanding new laws and requirements for different types of crypto businesses can be particularly challenging due to the lack of established precedents.
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